An insurer is not liable to pay compensation under a motor vehicle insurance policy for an accident that does not fall within the scope of the policy's coverage.

Headnote:
MOTOR VEHICLES ACT - INSURANCE - LIABILITY OF INSURER - WORKMEN'S COMPENSATION - EMPLOYEE NOT CARRIED IN VEHICLE - NO LIABILITY ON INSURER - APPEAL BY INSURER - COMPETENCY - SECTION 96(2) OF THE MOTOR VEHICLES ACT.
Fact of the Case:

Sabanna, an employee of Krishna Vulcanising Works, suffered a severe leg injury while loading stones onto a truck at a quarry. The truck belonged to Krishna Nair, the proprietor of the works. Sabanna filed an application for compensation under the Workmen's Compensation Act, claiming that his injury arose out of and in the course of his employment. The Commissioner for Workmen's Compensation awarded Sabanna compensation, holding Krishna Nair liable and imposing a penalty on him. The British India General Insurance Co. Ltd. (the insurer), which had issued a policy to Krishna Nair, appealed the decision, arguing that it was not liable to pay compensation because Sabanna was not carried in the vehicle at the time of the accident and the accident did not occur in a public place.
Finding of the Court:

The court held that the insurer was not liable to pay compensation to Sabanna because the accident did not fall within the scope of the policy's coverage. The court found that the policy only covered liabilities arising out of the use of the vehicle in a public place and that Sabanna was not being carried in the vehicle at the time of the accident. The court also held that the insurer's appeal was competent because Section 96(2) of the Motor Vehicles Act allowed the insurer to defend the action and appeal the judgment even if it had not been added as a party to the proceedings.
Issues: 1. Whether the insurer was liable to pay compensation to Sabanna under the policy issued to Krishna Nair. 2. Whether the insurer's appeal was competent.
Ratio Decidendi: 1. The court interpreted Section 95(1) of the Motor Vehicles Act, which requires insurance policies to cover certain liabilities, including those arising out of the death or bodily injury of any person caused by or arising out of the use of the vehicle in a public place. The court held that the policy issued by the insurer did not cover Sabanna's injury because he was not being carried in the vehicle at the time of the accident and the accident did not occur in a public place. 2. The court interpreted Section 96(2) of the Motor Vehicles Act, which allows an insurer to defend an action and appeal a judgment even if it has not been added as a party to the proceedings. The court held that the insurer's appeal was competent because it had been given notice of the proceedings and had appeared and filed a written statement.
Final Decision: The court allowed the insurer's appeal and set aside the Commissioner's order holding the insurer liable to pay compensation to Sabanna. The court also directed the parties to bear their own costs.

JUDGMENT - (1) This is an appeal by the British India General Insurance Co. Ltd. against the order passed by the Commissioner for Workmens Compensation awarding a sum of Rs. 5,880, Rs. 150 for costs + Rs. 1,000 for penalty against Opposite Party No. 2 (who would hereafter be called Krishna Nair) The material facts leading to the application for compensation may be stated as follows:-

(2) One Sabanna was employed by Krishna Vulcanising Works, of which Krishna Nair is the propritor, for doing the work of loading stones at the quarry. On 23-1-1964 while Sabanna was loading stones inthe truck belonging to Krishna Nair, a stone flew off from the quarry where the process of blasting was going on, and hit his leg Sabanna was hit by stone on his leg resulting in a severe injury . Sabanna wasadmitted in the Lokmanya Tilak Hostpital at Sion. His leg eventually came to be amputated. Sabanna, therefore, made an application before the Commissioner for Workmens Compensation for awaring him a sum of Rs. 6,860. Originally the application was filed against one Bhaskaram Nair who was described as the proprietor of Krishna Vulcanising Works. Bhaskaram Nair, by hiw written-statement, denied having employed Sabanna at any time. He also asserted that he was not a proprietor of Krishna vulvanising Works. He also stated that he was not the owner of the truck BMQ 2027. In view of the contentions raised by Bhaskaran Nair, Krishna Nair came to be added as the proprietor of Krishna Vulvanising Works. Krishna Nair by his written-statement contended that Sabanna was not employed by him as a workman and that Sabanna was an independent contractor with 7 person working under him. He did not however, deny that lorry No. BMQ 2027 belonged to him. He admitted that the lorry had gone to the Nenshi Munshi Quarry for transporting stones thereforem. According to him, blasting operations were going on in the quarry and a stone flew accidently from the blasting and hit the applicants leg. According to him, the accident did not arise out of and/or in the course of the employment. It may be mentioned that Sabanna had asserted that he fell within the wage group of 100-150 rupees Krishna Nair denied that Sabanna fell within the wage-group of 100-150 rupees. According to him, his wages did not exceed Rs. 60 per month.

(3) ON 9-12-1964, a notice was issued to the British General Insurance Co (hereinafter to be called "the insurer") under Section 96(2) of the Motor Vehicles Act. The Company appeared on 14-12-1964 and raised a number of contentions. The first was that the notice was not maintainable in law as the accident did not fall within the purview of the liabilities mentioned in Section 95 of the Motor Vehicles Act and also because the workman was not carried in the vehicle. The second contention was that the alleged accident took place at a private place, and therefore, the notice was not valid. The Company pointed out that the policy covered the risk in respect of the insurers liability arising out of the use of the vehicle in public places only. The third contention in the alternatives was that by virtue of the terms of the policy the Company is entitled to recover the sum awarded from the insured Section 96(3) of the Motor Vehicles Act. No application was made by the Insurance Company for being added as a party.

(4) Appropriate issues were raised and the Commissioner held that Sabanna was employed by Krishna Nair and that he received the injury by an accident arising out of and in the course of his employment. The Commissioner further held that Sabanna fell wihin the wage-group of 80-100 rupees. He also held that the extent of his loss of earning capacity came to 70 per cent and consequently. awarded Rs. 5,880 along with costs and an additional sum of Rs. 1,000 by wauy of penalty. It is against that order that the insurance company have come up in appeal.

(5) Mr. Pendse, who appears for Krishna Nair the insured, has raised a preliminary objection that the appeal does no

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